Thursday, September 23rd, 2004
The August survey asked for views on investment in plant & equipment, reinvesting profits, transfer of ownership, research & development tax credit, holidays and abuse from customers.
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About the respondents
177 respondents were drawn with the following population characteristics:
|Production & Manufacturing
|< 1 M
|Number of Full-time Employees
The first three questions in the August Survey were about investment decisions. The August UK Business Advisers Barometer, which drew 210 respondents, asked Advisers to consider their clients' investment decisions, and the two sets of results are compared here.
The influence of fiscal measures on investment decisions was the focus of the first question, and only 4.5% of Business Barometer panellists said that their decisions were highly sensitive to fiscal measures, while 5% of Advisers thought their clients decisions were highly sensitive. 40% of UKBB and 49% of UKBAB respondents replied in categories 2 and 3 - relatively to moderately highly sensitive. Far more UKBB respondents, 18%, than UKBAB, 6%, said that investment decisions are not at all sensitive to fiscal measures such as taxation.
15% of UKBB respondents found this question was not applicable to their circumstances and 14% of UKBAB respondents didn't know.
The second question looked at whether the design of corporation tax is relevant to the propensity to reinvest profits in the business. Over a third of UKBB respondents, 38%, and nearly a third of UKBAB respondents, 29%, said that corporation tax design influences profit reinvestment decisions highly or relatively highly. 22% of UKBB respondents opted for "not at all", compared with only 8% of UKBAB. The results for UKBAB respondents are shown after adjusting for the 12% of Advisers who didn't know.
Looking at long term investment resources, more twice as many UKBB respondents would prefer debt to equity, with 44% compared to 19%. However, 37% of our respondents found this not applicable. The UKBAB survey asked what clients preferences would be, and debt came out even further ahead of equity, with 70% choosing debt and 12% equity, but 18% didn't know.
Successor planning is probably not a high priority compared to issues that have defined deadlines, but we asked panellists to consider when and to whom they might transfer their business when the time comes. 26% are looking at less than a five year horizon, but 28% simply don't know . When looking at disposing of the business, only 14% thought that it might go to a family member, and 9% as a management buyout. 49% expected to sell the business, either as a going concern or assets only.
The Research and Development tax credit scheme was introduced in April 2000 for small and medium sized enterprises. Through the R&D; Tax Credit scheme, eligible companies are able to reduce taxation or claim cash sums. Knowledge about eligibility seems to be scarce among smaller businesses - 43% of UKBB respondents don't know if they are eligible, and 46% do not consider themselves eligible. In the parallel Business Advisers Survey, Business Advisers were asked to what extent their clients were aware of the R&D; tax credit. Although 11% of Advisers thought that their clients were fully or largely aware, 52% thought that clients were either basically aware or aware but not in detail.
11% of UKBB respondents think they are eligible and of these eligible respondents, only 22% are actually knowingly claiming it - the large 'don't know' response probably means that at least in some cases the matter is left to their accountants. Advisers with eligible clients vary in the percentage of clients that they think are claiming - the results are shown here for comparison. The percentages shown have been adjusted for the 31% of Advisers who don't know. 25% of responding Advisers found that none of their clients is eligible for the scheme.
Comments submitted through the Business Barometer Survey on why many eligible companies do not claim R&D; tax credit included views that it is difficult to understand and/or claim, while comments received from the Business Advisers Survey encompassed views that it is too complex for the sums involved and little understood, with poor information available.
Taking a break is thought to be important even for those running businesses, and the August Survey revealed that the two week Summer holiday is still popular with 54% of respondents. Only 6% take no holiday in summer, while 3% enjoy the luxury of more than three weeks.
55% of UKBB respondents have the length of their holidays determined by business factors beyond their control, to a high or relatively high extent, while 28% find this either not at all or only to a relatively small extent. The two week vacation is the most frequent length of holiday across all categories. Also, and as would be expected, the less business constraint on length of holiday there is, the greater the number of responses indicating longer holidays rather than none or shorter holidays. A higher percentage of respondents to the Business Advisers Survey were able to be unimpeded by business related factors, with 30% responding "not at all".
The benefits to the business of a summer break might be reflected in how people feel about their return to work. Both UK Business Barometer respondents and Advisers were asked how they personally feel. There was a degree of concurrence in the responses as can be seen in the chart, with more responding in the middle categories 2 and 3. The totals of the two most positive categories were over 50% for both UKBB and UKBAB respondents.
Clearly the interpretation of the term 'abuse' can be very wide. The question on abuse was asked in the context of a 'Respect for Shopkeepers Week' in July 2004, which followed the revelation that shop assistants were subject to verbal abuse and physical attack. The level of abuse experienced personally by our respondents is low, with only 1% of UKBB respondents saying that it has happened frequently. However, the UKBAB Survey asked if Advisers' clients have experienced abuse, and the response to that was 7% said frequently, after adjusting for the 14% 'don't know' response. What may be more surprising is that only 27% of UKBB respondents could say 'never'.
Listed below are extracts from feedback received in Survey
BB75 August 2004.
Comments are listed under sector headings.
Views expressed are those of individual panellists and may not represent those
of the University.
Abuse from customers is nearly always without provocation. Just like the aggression on the road drivers do not treat you as a human being. They see the car and not the person. It's time we all remember good manners cost nothing.
Another abuse we get is customers using Trading Standards as sticks to beat us with. It is intolerable that anyone can get them involved but there is no cost to them. This year I have successfully fought two such claims through the courts and complained about trading standards personnel who generally treat suppliers as guilty.
People like to abuse you because they are angry as a whole and they have to have someone to have a go at. Normally, (they choose) someone who cannot shout back at them, because this would be unprofessional.